AT&T Sued Over RSN Pricing

Cable op En-Touch says it has to pay too much to carry must-have RSN SportsNet Southwest, home to reigning World Series Champions the Houston Astros.

A tiny cable operator is taking on AT&T over the price of a regional sports network, raising issues of access to programming and anticompetitive conduct.

The suit, filed by En-Touch, which operates in the Greater Houston area, comes days after the Justice Department filed suit to block the AT&T-Time Warner merger over the same concerns.

En-Touch, a member of the American Cable Association, filed its antitrust suit against AT&T-DirecTV in a Los Angeles District Court, alleging that DirecTV pays above-market rates for AT&T SportsNet Southwest in Houston, an RSN the satellite provider co-owns.

En-Touch told the court that regional sports is must-have programming, as the FCC has pointed out, particularly for new entrants trying to compete with pay TV's major-league players.

As a result, En-Touch said it has to carry the RSN -- which is home to the Houston Astros MLB and Houston Rockets NBA teams -- but at an inflated price due to the pricing structure that caused the network's demise under its previous ownership by Comcast.

"The continuation by Defendants of the artificially high pricing structure allows Defendants to plead innocence when accused of anti-competitive pricing, proclaiming that AT&T SportsNet is expensive for all MVPDs, including Defendant MVPDs," En-Touch argued.

"Thus, the arrangement is a win-win for AT&T because it receives a revenue boost from its subsidiary, AT&T SportsNet, while both harming small MVPDs and keeping an entrance barrier for other MVPDs trying to enter the market."

En-Touch said that is restraining of trade and an attempt to monopolize the market.

The suit even added some net-neutrality/zero-rated issues for good measure: "AT&T chairman and CEO Randall Stephenson has been vocal in his proclamation that AT&T is aggressively pursuing even more of that market, especially through the company’s 'zero-rated services' like U-verse Data Free TV and DirecTV Now," En-Touch told the court. "In this instance, 'zero-rated services' are those that a telecommunications data provider like AT&T does not count against an individual subscriber’s data plan. In other words, AT&T allows individual subscribers using its cellular network to stream video via services like U-verse Data Free TV and DirecTV Now on the U-verse or DirecTV app without counting against that individual’s data plan."

En-Touch wants treble damages, attorneys fees and a jury trial.

"We believe the complaint lacks merit and we’ll vigorously defend it in court," AT&T said in response.